United States Court of Appeals 

for the Federal Circuit ______________________ 

SOVERAIN SOFTWARE LLC,

Plaintiff-Appellee,

v.

NEWEGG INC.,

Defendant-Appellant.

______________________ 

2011-1009

______________________ 

Appeal from the United States District Court for the 

Eastern District of Texas in case no. 07-CV-0511, Judge 

Leonard Davis.

______________________ 

Decided: January 22, 2013 

______________________ 

ROBERT B. WILSON, Quinn Emanuel Urquhart & Sullivan, LLP, of New York, New York, argued for the plaintiff-appellee. With him on the brief were DAVID NELSON 

and NEIL G. CAVE. Of counsel was PAUL J. RIPP, Williams 

Montgomery & John Ltd., of Chicago, Illinois. 

EDWARD R. REINES, Weil, Gotshal & Manges, LLP, of 

Redwood Shores, California, argued for the defendantappellant. Of counsel on the brief were KENT E. BALDAUF,

JR., DAVID C. HANSON and DANIEL H. BREAN, The Webb 

Law Firm, of Pittsburgh, Pennsylvania; and CLAUDIA W.
2 SOVERAIN SOFTWARE v. NEWEGG

FROST and KEVIN M. FONG, Pillsbury Winthrop Shaw 

Pittman, LLP, of Houston, Texas. 

______________________ 

 

Before NEWMAN, PROST, AND REYNA, Circuit Judges. 

NEWMAN, Circuit Judge. 

Soverain Software LLC brought this patent infringement suit against Newegg Inc. for infringement of 

specified claims of United States Patent No. 5,715,314 

(“the ’314 patent”), its continuation Patent No. 5,909,492 

(“the ’492 patent”), and Patent No. 7,272,639 (“the ’639 

patent”). The patents relate to electronic commerce, 

wherein a merchant’s products are offered and purchased 

online, through computers interconnected by a network. 

The patents arise from a software system called “Transact” that was developed in 1996 by a company named 

Open Market, Inc. The Abstract of the ’314 and ’492 

patents describes the subject matter as follows

A network-based sales system includes at least 

one buyer computer for operation by a user desiring to buy a product, at least one merchant computer, and at least one payment computer. The 

buyer computer, the merchant computer, and the 

payment computer are interconnected by a computer network. The buyer computer is programmed to receive a user request for purchasing 

a product, and to cause a payment message to be 

sent to the payment computer that comprises a 

product identifier identifying the product. The 

payment computer is programmed to receive the 

payment message, to cause an access message to 

be created that comprises the product identifier 

and an access message authenticator based on a 

cryptographic key, and to cause the access mes-
 SOVERAIN SOFTWARE v. NEWEGG 3

sage to be sent to the merchant computer. The 

merchant computer is programmed to receive the 

access message, to verify the access message authenticator to ensure that the access message authenticator was created using the cryptographic 

key, and to cause the product to be sent to the user desiring to buy the product.

Figure 1 in the ’314 and ’492 patents is:

In 2001 Open Market was sold, with the Transact 

software and patents, to a company named Divine, Inc. 

Former Divine employee and current Soverain President 

Katharine Wolanyk testified that the Transact software 

was “a very complex product” that required constant 

support services and engineering development, that 

Divine was unable to provide the necessary support and 

development, and that Divine declared bankruptcy after 

fifteen months. Soverain acquired the Transact software 

and patents. Soverain then sued seven online retailers, 

including Newegg, for patent infringement. The record 

states that all of the defendants except Newegg took paid-
4 SOVERAIN SOFTWARE v. NEWEGG

up licenses to the patents. Trial Tr. 47 ll.7-25, ECF No. 

392.

Newegg declined to pay for a license, stating that 

its system is materially different from that described and 

claimed in the patents, and that the patents are invalid if 

given the scope asserted by Soverain. Newegg pointed out 

that similar electronic commerce systems were known 

before the patented system, that the Transact software 

was generally abandoned, and that Newegg’s system, 

which is based on the different principle of using “cookies” 

on the buyer’s computer to collect shopping data, is outside of the claims.

Suit against Newegg proceeded in the United 

States District Court for the Eastern District of Texas.1 

The jury found Newegg liable for infringement of the ’314 

and ’492 patents, and awarded Soverain damages of $2.5 

million. The jury found that Newegg did not infringe the 

’639 patent, but the district court granted Soverain’s 

motion for JMOL of infringement of the ’639 patent, and 

ordered a new trial to assess damages for the ’639 patent, 

to be tried after the completion of appeals. The district 

court awarded Soverain post-verdict damages and an 

ongoing royalty.

After the close of evidence the district court removed the question of obviousness from the jury, the 

court stating: “I don’t think there’s sufficient testimony to 

present an obviousness case to the jury. I think it would 

be very confusing to them.” Trial Tr. 3 ll.9-12, ECF No. 

395. The district court then held that the claims are not 

invalid on the ground of obviousness. Op. at 478-79. 

Newegg’s motions for JMOL or a new trial were denied.

1 Soverain Software LLC v. Newegg, Inc., 836 F. 

Supp. 2d 462 (E.D. Tex. 2011) (herein “Op.”).

 
 SOVERAIN SOFTWARE v. NEWEGG 5

OBVIOUSNESS

Obviousness is a question of law based on underlying facts, as set forth in Graham v. John Deere Co., 383 

U.S. 1 (1966). The Graham factors are (1) the scope and 

content of the prior art, (2) the difference between the 

prior art and the claimed invention, (3) the level of ordinary skill in the field of the invention, and (4) any relevant objective considerations. The Graham Court 

explained that “the ultimate question of patent validity is 

one of law.” Id. at 17. Thus on appellate review, the 

question of obviousness is decided de novo. See Vulcan 

Eng’g Co. v. Fata Aluminium, Inc., 278 F.3d 1366, 1372 

(Fed. Cir. 2002) (district court’s application of the law of 

obviousness to the found facts is reviewed for correctness); 

C.R. Bard, Inc. v. M3 Sys., Inc., 157 F.3d 1340, 1351-52 

(Fed. Cir. 1998) (“The ultimate determination of obviousness vel non is a legal conclusion.”).

Newegg argues that it was wrongfully deprived of a 

jury determination of the question of obviousness, pointing to the extensive testimony on this issue at trial. 

However, Federal Rule of Civil Procedure 50 “allows the 

trial court to remove cases or issues from the jury’s consideration ‘when the facts are sufficiently clear that the 

law requires a particular result,’” Weisgram v. Marley Co., 

528 U.S. 440, 448 (2000) (quoting Wright & Miller, Federal Practice and Procedure (2d ed. 1995)). The Court has 

explained that the purpose of Rule 50 is “to speed litigation and avoid unnecessary retrials.” Neeley v. Martin K. 

Eby Const. Co., 386 U.S. 317, 326 (1967).

Although here both sides had presented witnesses 

and evidence on the question of obviousness, the district 

court’s removal of the legal question from the jury did not 

violate the right to jury trial. See Markman v. Westview 

Instruments, Inc., 517 U.S. 370, 389 (1996) (“[A]ny credi-
6 SOVERAIN SOFTWARE v. NEWEGG

bility determinations will be subsumed within the necessarily sophisticated analysis of the whole document.”). In 

KSR International Co., v. Teleflex, Inc., 550 U.S. 398, 427 

(2007), the Court applied similar principles in its determination of the question of obviousness, stating that: 

“Where, as here, the content of the prior art, the scope of 

the patent claim, and the level of ordinary skill in the art 

are not in material dispute, and the obviousness of the 

claim is apparent in light of these factors, summary 

judgment is appropriate” and remand unnecessary.

However, questions of law must be correctly decided, and the district court’s determination of the question 

of obviousness as a matter of law receives de novo determination on appeal. See Western Union Co. v. 

MoneyGram Payment Sys., Inc., 626 F.3d 1361, 1369 (Fed. 

Cir. 2010) (reversing judgment of nonobviousness when 

“[t]he parties’ disputes revolve around whether the prior 

art taught three specific elements of the claimed inventions, whether there was a motivation to combine these 

elements with the prior art system, and whether secondary considerations support a finding of nonobviousness.”); 

Muniauction, Inc. v. Thomson Corp., 532 F.3d 1318, 1327 

(Fed. Cir. 2008) (reversing judgment of nonobviousness 

when defendant “clearly and convincingly established a 

prima facie case that [the] claims [were] obvious as a 

matter of law.”); Inventio AG v. Otis Elevator Co., No. 

2011-1615, 2012 WL 5907489, at *5 (Fed. Cir. Nov. 27, 

2012) (non-precedential) (reversing judgment of nonobviousness when patent was “a clear example of a ‘combination of familiar elements according to known methods 

[yielding] no more than . . . predictable results.’” (citations 

omitted)).

On these premises, we determine the question of 

obviousness. Newegg relied primarily on a prior electronic commerce system called “CompuServe Mall.” The 
 SOVERAIN SOFTWARE v. NEWEGG 7

district court, sustaining validity of all claims in suit, did 

not discuss the claims or the prior art; the court stated 

that Newegg’s expert had not presented a prima facie case 

of obviousness, and criticized Newegg for not presenting 

“some articulated reasoning with some rational underpinning to support the legal conclusion of obviousness.” 

Op. at 479.

The parties divided the claims in suit into three 

groups, and presented evidence and argument, including 

expert and other witness testimony, for the claims as 

grouped. We retain the parties’ groupings, as follows:

A 

The ’314 and ’492 patents – the “shopping cart” claims

Soverain asserted claims 34 and 51 of the ’314 patent and claim 17 of the ’492 patent as a group called the 

“shopping cart” claims. These claims are directed to the 

overall system wherein products are offered online by a 

merchant, a buyer designates products for purchase, and 

payment for the designated products is initiated upon the 

buyer’s request for checkout, all operating through a 

computer network. The parties agreed that claim 34 of 

the ’314 patent is representative of this group. Claim 34 

follows (with bracketed numbers added):

34. A network-based sales system, comprising:

[1] at least one buyer computer for operation 

by a user desiring to buy products;

[2] at least one shopping cart computer; and

[3] a shopping cart database connected to said 

shopping cart computer;

[4] said buyer computer and said shopping 

cart computer being interconnected by a computer 

network; 
8 SOVERAIN SOFTWARE v. NEWEGG

[5] said buyer computer being programmed to 

receive a plurality of requests from a user to add a 

plurality of respective products to a shopping cart 

in said shopping cart database, and, in response to 

said requests to add said products, to send a plurality of respective shopping cart messages to said 

shopping cart computer each of which comprises a

product identifier identifying one of said plurality 

of products;

[6] said shopping cart computer being programmed to receive said plurality of shopping cart 

messages, to modify said shopping cart in said 

shopping cart database to reflect said plurality of 

requests to add said plurality of products to said 

shopping cart, and to cause a payment message 

associated with said shopping cart to be created; 

and

[7] said buyer computer being programmed to 

receive a request from said user to purchase said 

plurality of products added to said shopping cart 

and to cause said payment message to be activated to initiate a payment transaction for said plurality of products added to said shopping cart;

[8] said shopping cart database being a database of stored representations of collections of 

products, and said shopping cart computer being a 

computer that modifies said stored representations of collections of products in said database.

At the trial the CompuServe Mall system was the 

primary reference against the shopping cart claims, 

including two books describing the system: Bowen & 

Peyton, How to Get the Most Out of CompuServe (4th ed. 

1989) and Ellsworth & Ellsworth, Using CompuServe

(1994). Newegg presented testimony of CompuServe’s 
 SOVERAIN SOFTWARE v. NEWEGG 9

former Chief Technology Officer Alexander Trevor, 

Newegg’s expert witness Mr. Edward Tittel, and Newegg’s 

Chief Technology Officer James Wu, who designed the 

Newegg system.

Mr. Tittel compared claim 34 with the prior art system, element by element. Trial Tr. 55-81, ECF No.394. 

Mr. Tittel testified that the CompuServe Mall was a 

“network-based sales system” (claim preamble) in which 

the buyer computer (clause [1]) interacted with a CompuServe server computer (clause [2]) that stored buyers’ 

product selections in “shopping carts” called personal 

holding files (clause [3]), all via a computer network 

(clause [4]). Id. 57-60. Mr. Tittel explained that products 

were added to the personal holding files when the buyer 

computer sent an order command “O” to the CompuServe 

server, at which time the server would “update” the 

personal holding file for each such selection (clauses [5], 

[6] and [8]). Id. 61-63. When the buyer was ready for 

checkout, the buyer typed “checkout” and was presented 

with a screen to review the designated items, and with a 

request to initiate payment (clause [7]). Id. 64-65. Mr. 

Tittel concluded that all of the elements and limitations of 

Soverain’s shopping cart claims were “shown or apparent” 

in the prior art CompuServe Mall. Id. 67 l.25. 

Mr. Trevor testified as to the CompuServe Mall 

system, for which he had been the Chief Technology 

Officer. According to Mr. Trevor, the CompuServe Mall 

provided the buyer with access to over a hundred online 

stores. Trial Tr. 32 ll.21-23, ECF No. 396. Within each 

store, products were presented in menus. When a buyer

found a product of interest, the buyer selected the product 

from the store menu and a detailed description would be 

displayed, in some cases with a photograph. Id. 33 ll.9-13. 

If the buyer wanted to purchase the product, the buyer 

would type the order command “O” and CompuServe 
10 SOVERAIN SOFTWARE v. NEWEGG

would store the product in the buyer’s personal holding 

file on the server. Id. 33 ll.14-17. The buyer could designate up to forty items for placement in the personal 

holding file. Id. 34 ll.8-11. By typing “checkout,” the 

buyer could review selections and modify or delete items 

in the personal holding file, or proceed to purchase. Id. 43

ll.8-17. 

Soverain’s expert witness Dr. Michael Shamos 

stated that the Newegg witnesses’ description of the 

CompuServe Mall was “consistent with my understanding,” but presented the argument that the CompuServe 

Mall lacked two elements of the shopping cart claims: 

first, that the CompuServe system lacked the “shopping 

cart message [that] comprises a product identifier” of 

claim clause [5]; and second, that CompuServe lacked the 

“shopping cart database” of clause [3]. Trial Tr. 154-69, 

ECF No. 397. Dr. Shamos did not dispute that the other 

elements of claim 34 were embodied in the CompuServe 

Mall. We have given particular attention to the two

aspects on which the witnesses stated divergent views.

1. the product identifier message, clause [5]

Dr. Shamos did not disagree with Mr. Tittel that 

the CompuServe Mall’s “order command” was a “shopping 

cart message” as in clause [5], and agreed that when a 

CompuServe Mall buyer entered the order command, the 

CompuServe server computer would identify the product 

and place it in a personal holding file for that buyer. Trial 

Tr. 155 ll.24-25, ECF No. 397; id. 165 ll.5-9. However, Dr. 

Shamos argued that the CompuServe Mall was different 

because the “product identifier” in the CompuServe Mall 

was not “in the message.” Id. 154 ll.9-17. Dr. Shamos 

stated that the CompuServe Mall system of product 

identification was based not on the order command itself, 

but on what the server “knew” based on “previously sent” 
 SOVERAIN SOFTWARE v. NEWEGG 11

messages. Id. “It was just an indication that the order 

key had been—had been hit at that time.” Id. 156 ll.2-3. 

Thus Dr. Shamos argued that the CompuServe order 

command was not a “message . . . which comprises a 

product identifier” as required by claim clause [5]. Id. 155 

ll.2-7.

The distinction proposed by Dr. Shamos and advanced by Soverain is not embodied in the claims and not 

reflected in the claim construction. It was not disputed 

that the CompuServe Mall order command designated a 

specific product for placement in the buyer’s personal 

holding file, or shopping cart, as recited in claim clause 

[3]. See Trial Tr. 54, ECF No. 394; Trial Tr. 165 ll.5-9, 

ECF No. 397. Nor was it disputed that, regardless of how

the order command was structured, it conveyed the requisite information to the CompuServe server computer. Id. 

The message set forth in the claims is not distinguished 

from the message in the CompuServe Mall. The term 

“product identifier” was not given a special meaning in 

the specification or through claim construction, and 

contains no designated format requirements. “No principle of law . . . authorize[s] . . . read[ing] into a claim an 

element which is not present, for the purpose of making 

out a case of novelty . . . .” E.I. DuPont de Nemours & Co. 

v. Phillips Petroleum Co., 849 F.2d 1430, 1433 (Fed. Cir. 

1988) (quoting McCarty v. Lehigh Valley R. Co., 160 U.S. 

110, 116 (1895)).

Soverain also argues that its system is superior to 

the CompuServe “order command” because the system of 

the patents in suit is adapted to the Internet, whereas the 

CompuServe Mall operated on a pre-Internet network. 

Trial Tr. 159-162, ECF No. 397. In Muniauction this 

court held that “conducting previously known methods 

through an Internet web browser was obvious because it 

amounted to no more than applying the use of the Inter-
12 SOVERAIN SOFTWARE v. NEWEGG

net to existing electronic processes at a time when doing 

so was commonplace.” 532 F.3d at 1327. Precedent 

agrees with Newegg that a person of ordinary skill2 could 

have adapted the CompuServe order command to known 

browser capabilities when these capabilities became 

commonplace, and that it was obvious to do so. The 

product identifier message term does not distinguish the 

shopping cart claims from the prior art CompuServe Mall.

2. the shopping cart database, clause [3]

Dr. Shamos also stated his opinion that the CompuServe Mall did not have a “shopping cart database” as 

in the claims in suit. Dr. Shamos agreed with Newegg’s 

expert Mr. Tittel that the CompuServe Mall system 

included “personal holding files,” and Dr. Shamos agreed 

that a shopping cart database “might have been a reasonable design choice,” but he opined that such database 

“wasn’t required” by the CompuServe Mall and that the 

prior art did not “necessarily disclose a database.” Trial 

Tr. 167 ll.12-16, ECF No. 397. 

The agreed claim construction for “shopping cart 

database” was “a database of stored representations of 

collections of products,” where “database means a collection of logically related data stored together by one or 

more computerized files.” Claim Construction Order 3, 

2 The parties agreed that the level of ordinary skill 

in the field of this invention is “a Bachelor of Science 

degree in computer engineering or computer science, or 

equivalent education, with two to three years of practical 

experience developing or operating software and systems 

that relate to commerce on the Internet.” Plaintiff’s 

Submission of Joint Proposed Charge of the Court 29-30, 

ECF No. 289-3; Defendant’s Submission of Joint Proposed 

Charge of the Court 35, ECF No. 289-4.

 
 SOVERAIN SOFTWARE v. NEWEGG 13

ECF No. 214. The use of personal holding files in the 

CompuServe Mall is easily within this definition. Mr. 

Tittel testified that the personal holding file in CompuServe Mall was “a shopping cart in a shopping cart 

database.” Trial Tr. 56 ll.9-10, ECF No. 394. He explained that “[t]he personal holding file itself is a shopping cart. And because CompuServe supported multiple 

individuals shopping in the same store at the same time, 

a collection of such files would be maintained, and that 

would meet the Court’s requirements for a shopping cart

database.” Id. 56 ll.11-16. In addition, Mr. Trevor testified that the personal holding files in the CompuServe 

Mall system stored products “specific to each customer” 

and constituted an “in-memory database.” Trial Tr. 39 

ll.7-10, ECF No. 396. 

The Ellsworth & Ellsworth book describes the storage of customer product selections in the CompuServe 

personal holding files. Using CompuServe 376, ECF No.

247-10 (“When you find a product that you want to buy, 

press O for order. Your order will be stored in a personal 

holding file until you leave that merchant’s store.”). The 

book further describes that items placed in the personal 

holding file are not yet purchased, and are held until the 

buyer types the “checkout” command. Id. (“When you are 

finished shopping in that store, type checkout. An 

electronic order form appears.”). 

When Dr. Shamos was asked how a person of skill 

in the art would have implemented the CompuServe 

online shopping system other than through a database, he 

suggested that CompuServe could have used a “fulfillment house,” which would “fill your order and send it to 

you without ever recording it in a database.” Trial Tr. 

168 ll.9-14, ECF No. 397. Whether that alternative was 

feasible, it is not stated to be what CompuServe did. The 

Ellsworth & Ellsworth book states that the buyer’s prod-
14 SOVERAIN SOFTWARE v. NEWEGG

uct selections are “stored”—not sent “without ever recording it in a database.” The “fulfillment house” alternative 

proposed by Dr. Shamos does not relate to a personal 

holding file, and appears to have no relation to either the 

prior art or the patents. Dr. Shamos conceded that a 

database would have been a “reasonable design choice” for 

the personal holding files, and his statements that the 

prior art did not “necessarily disclose a database” are not 

evidence of nonobviousness. “Because the patentee is 

required to define precisely what his invention is . . . it is 

unjust to the public, as well as an evasion of the law, to 

construe it in a manner different from the plain import of 

its terms.” Phillips v. AWH Corp., 415 F.3d 1303, 1312 

(Fed. Cir. 2005) (en banc) (citations omitted).

The district court’s conclusion that a prima facie 

case of obviousness was not met is not explained by the 

court or by Soverain, and does not accord with the record. 

Dr. Shamos did not provide evidence to rebut Newegg’s 

prima facie case that every claim element was embodied 

in the prior art.

Although the district court criticized Mr. Tittel’s 

expert report on the question of obviousness, the trial 

record contains extensive testimony of the experts for 

both sides, discussing every claimed element of the patented subject matter and the prior art system. Their 

testimony was subjected to examination and crossexamination, before decision of the question of obviousness was removed from the jury. Also, precedent does not 

require “expert” opinions on matters of law. In Nutrition 

21 v. United States, 930 F.2d 867, 871 n.2 (Fed. Cir. 1991) 

this court observed that “[a]n expert’s opinion on the 

ultimate legal conclusion is neither required nor indeed 

‘evidence’ at all.” Avia Group Int’l v. L.A. Gear Cal., Inc., 

853 F.2d 1557, 1573 (Fed. Cir. 1988) (“an expert’s opinion 
 SOVERAIN SOFTWARE v. NEWEGG 15

on the legal conclusion of obviousness is neither necessary 

nor controlling”).

We conclude that the prior art CompuServe Mall 

system, by clear and convincing evidence, rendered obvious the “shopping cart” claims: claims 34 and 51 of the 

’314 patent and claim 17 of the ’482 patent. These claims 

are invalid; the district court’s contrary ruling is reversed.

B 

The ’492 patent – the “hypertext statement” claims

The ’492 patent is a division of the ’314 patent, 

with the same specification and drawings. Soverain 

asserted infringement of claims 41 and 61 of the ’492 

patent, called the “hypertext statement” claims. These 

claims are directed to the aspect of the online shopping 

system set forth in the patents, in which the client computer receives transaction statements from the server 

computer, in response to a request from the client computer. The district court included these claims in its 

ruling of nonobviousness, although the specific subject 

matter and claims were not mentioned by the court. We 

thus determine this question of law de novo. 

Claim 41 is shown below, with claim 15 from which 

it depends, and bracketed numbers added to each claim 

clause:

15. A hypertext statement system, comprising:

[1] a client computer for operation by a client 

user; and 

[2] one or more server computers for operation by a server user; 

[3] the client computer and the server computers being interconnected by a public packet 

switched computer network;
16 SOVERAIN SOFTWARE v. NEWEGG

[4] at least one of the server computers being 

programmed to record information pertaining to 

purchase transaction records in a database, and to 

transmit a statement document comprising the 

purchase transaction records to the client computer over the network;

[5] the client computer being programmed to 

display the statement document to receive a request from the client user to display transaction 

details corresponding to a portion of the statement 

document displayed by the client computer, and to 

cause a transaction detail hypertext link corresponding to the portion of the statement document 

to be activated;

[6] at least one of the server computers being 

programmed to respond to activation of the transaction detail hypertext link by transmitting the 

transaction details to the client computer over the 

network as a transaction detail document.

41. A hypertext statement system in accordance 

with claim 15, wherein

[7] the statement document is sent by at least 

one of the server computer to the client computer 

in response to a statement URL sent by the client 

computer to at least one of the server computers.

Newegg argued that claim 41 is rendered obvious by the 

CompuServe Mall system, for the commonplace sending of 

a statement of a transaction or receipt, in response to a 

URL inquiry by the purchaser (claim clause [7]), does not

contribute nonobviousness to known systems of ecommerce over the network, (clause [6]). Mr. Tittel’s 

testimony included an element by element comparison of 

these claims with the CompuServe Mall statement sys-
 SOVERAIN SOFTWARE v. NEWEGG 17

tem. Trial Tr. 71-76, ECF No. 394. Mr. Tittel testified 

that in the CompuServe Mall, the client user operated a 

client computer (clause [1]), and a server user operated a 

server computer (clause [2]), and the computers were

interconnected by a public network (clause [3]). Id. 72. 

The CompuServe server recorded and transmitted purchase information, and provided a “confirmation number”

from which buyers could “get all the information about 

that transaction that you might ever need,” (clause [4]). 

Id. 73 ll.10-22. The client user could request transaction 

information using the confirmation number (clause [5]), 

and receive access to such information from the CompuServe system (clause [6]), though not using URLs or 

hypertext (clause [7]). Id. 74 ll.4-5. Mr. Tittel explained 

that the CompuServe Mall did not employ hypertext or 

URLs because it pre-dated the Internet and did not use 

the tools of the World Wide Web, but “[a]nyone who could 

get access to the text in a transaction record would understand how to use html to present that information at a 

variety of levels of details.” Id. 75 ll.13-18.

At the trial, both sides presented testimony concerning the statement URL (clause [7]). Dr. Shamos 

argued that the statement URL rendered these claims 

nonobvious because there was no way of obtaining transaction details online in the CompuServe Mall system. 

Trial Tr. 173 ll.3-20, ECF No. 397; Soverain Br. 46. Mr. 

Tittel testified that hypertext and URLs are basic functionalities of the World Wide Web, and that “[a]nyone who 

wanted to move shopping on the web would know they 

had to use URLs to tie things together to deliver information.” Trial Tr. 71 ll.4-6, ECF No. 394. 

Also in suit was claim 61 of the ’492 patent, shown 

with claims 1 and 60 from which claim 61 depends:
18 SOVERAIN SOFTWARE v. NEWEGG

61. A hypertext statement system in accordance 

with claim 60, wherein the information on transactions by the user includes at least one of the following types of information: a date of transaction, 

an identification of the product, a payment 

amount, and a merchant identifier.

60. The method of claim 1, wherein at least one 

service request comprises a purchase request, the 

purchase request including an associated user 

identifier, the method further comprising:

accessing, upon receipt of the purchase request at the server system, user information associated with the user identifier sufficient to charge 

to an account associated with the user, the purchase price of the product identified by the purchase request;

charging the user for the product identified 

by the purchase request according to the user information; and 

fulfilling the purchase request based on the 

user information.

1. A method of processing service requests from a 

client to a server system through a network, said 

method comprising the steps of

forwarding a service request from the client 

to the server system, wherein communications between the client and server system are according 

to hypertext transfer protocol; 

returning a session identifier from the servicer system to the client, the client storing the 

session identifier for use in subsequent distinct 

requests to the server system; and
 SOVERAIN SOFTWARE v. NEWEGG 19

appending the stored session identifier to 

each of the subsequent distinct requests from the 

client to the server system.

Newegg points out that the elements of a “statement 

URL” (claim 41) and general purchase information (claim 

61) are “routine modifications that are a part of adapting 

[the Internet] to an existing system,” and do not render 

the system nonobvious, citing Western Union, 626 F.3d at 

1370, where the court held the claimed system of Internet-based money transfer to be obvious, for the prior art 

money transfers were simply implemented by a newer

electronic method that had become commonplace. Reply 

Br. 4. See also Muniauction, 532 F.3d at 1326 (“modification of [bid calculation software] to incorporate web 

browser functionality represents a combination of two 

well known prior art elements to a person of ordinary skill 

in the art.”). Although Soverain argues that the CompuServe Mall did not disclose “most, if not all, of the 

elements recited in the hypertext statement claims,” such 

as a “statement document,” or a “transaction detail document,” Soverain Br. 46, the record does not support that 

argument, but rather supports Newegg’s argument that 

these aspects were performed in the CompuServe Mall 

system. 

Mr. Tittel explained that in the CompuServe Mall, 

buyers could get all the information about a transaction

from the confirmation number. Tr. 73 ll.10-22, ECF No. 

394. Soverain argues that in CompuServe Mall it might 

be necessary to resort to the telephone or email to get the 

transaction information, but Newegg states that whatever 

distinction Soverain is drawing, it is not a limitation on 

the claims other than a commonplace Internet capability 

to facilitate on-line transactions. See Muniauction, 532 

F.3d at 1327 (holding it obvious to “apply[ ] the use of the 
20 SOVERAIN SOFTWARE v. NEWEGG

Internet to existing electronic processes at a time when 

doing so was commonplace.”).

Open Market did not invent the Internet, or hypertext, or the URL. See Trial Tr. 196-97, ECF No. 397 

(testimony of Soverain’s expert Dr. Shamos). Newegg is 

correct that the use of hypertext to communicate a

“statement document” or “transaction detail document” 

was a routine incorporation of Internet technology into 

existing processes. See Western Union, 626 F.3d at 1370-

71; Muniauction, 532 F.3d at 1327.

We conclude that Newegg presented clear and convincing evidence of obviousness of claims 41 and 61 of the 

’492 patent. The district court’s ruling of nonobviousness 

is reversed.

C 

The ’639 patent – the “session identifier” claims

The ’639 patent is directed to “methods of processing service requests from a client to a server system 

through a network.” ’639 patent, col.3 ll.6-7. The subject 

matter is summarized in the ’639 Abstract as follows:

This invention relates to methods for controlling 

and monitoring access to network servers. In particular, the process described in the invention includes client-server sessions over the Internet. In 

this environment, when the user attempts to access an access-controlled file, the server subjects 

the request to a secondary server which determines whether the client has an authorization or 

valid account. Upon such verification, the user is 

provided with a session identification which allows the user to access to the requested file as 

well as any other files within the present protection domain.
 SOVERAIN SOFTWARE v. NEWEGG 21

Claims 60 and 79 of the ’639 patent were in suit, called 

the “session identifier” claims. The jury found that these 

claims are not infringed by the Newegg system. On 

Soverain’s motion for JMOL as to claim 79, the district 

court reversed the verdict and ruled the claim infringed. 

Claim 60 was not included in Soverain’s motion, and is 

not included on this appeal. Claim 79 follows, shown with 

claim 78 from which it depends:

79. The method of claim 78, further comprising, 

in the server system:

 receiving an initial service request from 

the client;

 creating, responsive to the initial service 

request, the session identifier; and

 returning the session identifier to the client for storage by the client for use in subsequent 

requests to the server system.

78. A method of processing, in a server system, 

service requests from a client to the server system 

through a network, said method comprising the 

steps of:

receiving, from the client, a service request to which a session identifier stored at the 

client has been appended by the client, wherein 

communications between the client and server 

system are according to hypertext transfer protocol;

 validating the session identifier appended 

to the service request; and servicing the service 

request if the appended session identifier is valid.

The parties stipulated that “session identifier” 

means “a text string that identifies a session,” wherein a 
22 SOVERAIN SOFTWARE v. NEWEGG

“session” is a “series of requests and responses to perform 

a complete task or set of tasks between a client and a 

server system.” Claim Construction Order 3, ECF No. 

214. Newegg again argues that the district court erred in 

its ruling of nonobviousness. The court did not discuss 

the prior art or explain its reasoning, other than to include this patent in the general statement that Newegg 

had not presented a prima facie case of nonobviousness, 

and to criticize the expert witness for omitting to provide 

his conclusions as to validity.

Newegg relies on U.S. Patent No. 5,560,008 to 

Johnson and U.S. Patent No. 5,724,424 to Gifford, stating 

that either Johnson alone, or Johnson in view of Gifford, 

renders obvious the claimed subject matter. Soverain 

responds that neither Johnson nor Gifford discloses a 

“session identifier.” Soverain states that the “credential 

identifier” of Johnson cannot be a “session identifier” 

because it identifies a “user rather than a session,” and 

therefore “can cover a portion of a single session or . . . 

multiple sessions.” Soverain Br. 47. Newegg states, and 

Mr. Tittel explained at trial, that “the same mechanisms 

that are used to set up a network login [as in Johnson] 

apply to establishing a session [as in the ’639 patent].” 

Newegg Br. 42-43; Trial Tr. 78 ll.17-18, ECF No. 394. 

The “credential identifier” is described by Johnson 

as follows: 

A message, called a request for service, is 

sent from the user client machine to the server 

remote machine anytime that service is needed on 

the remote machine. . . . The server builds a set of 

credentials that represent all of the interesting 

security facts about the remote user. This information includes the user id, the group id that the 

user is in, the group set of other group ids that the 
 SOVERAIN SOFTWARE v. NEWEGG 23

user has access to, an account id, the set of privileges of the user that allow the user to bypass the 

normal security restrictions on the system, etc. 

The server establishes all of the credentials for 

the user, and stores this information in a data 

structure called the credentials structure, and returns a small value (e.g. 64 bits) to the client machine where the user is running. This returned 

small value is referred to as the credentials identifier.

After the credentials identifier is returned 

to the user, all the user has to do is to present the 

credentials identifier to the server in every request requiring authentication that is made of 

that server. . . . 

Johnson patent col.5 l.47-col.6 l.2. The credential identifier in Johnson is “a flexible authentication and authorization process,” col.6 ll.51-54, where the server decides 

“the length of time that the credential structure will be 

maintained,” col.6, ll.51-54.

Mr. Tittel testified that the patents to Johnson and 

Gifford show all of the elements of claims 78 and 79. 

Trial Tr. 76-81, ECF No. 394. He testified that the “service requests” of the ’639 claims appear in Johnson’s 

“requests for service.” Id. 79 ll.5-6. The ’639 claims refer 

to “appending” the session identifier to a service request, 

and Johnson refers to “presenting” the credential identifier in “every request.” Id. 81 ll.3-4.

Dr. Shamos testified that the ’639 claims are distinguishable because the Johnson reference pre-dated the 

World Wide Web. However, Mr. Tittel pointed out that 

that the Gifford reference includes application of the Web 

to the same effect. Id. 80 ll.8-11. Gifford describes a 

“complete system for the purchasing of goods or infor-
24 SOVERAIN SOFTWARE v. NEWEGG

mation over a computer network,” that is “based upon the 

hypertext conventions of the World Wide Web.” Gifford 

patent, Abstract; col.4 ll.61-63. Gifford specifically teaches the use of hypertext strings in e-commerce transactions 

for payment authorization and security, a “transaction 

identifier” that is a hypertext string used to authenticate 

a transaction. Id. col.11 ll.32-35. Soverain does not 

dispute that Gifford teaches “additional Internet functionality” not taught in Johnson. Soverain Br. 47.

On the agreed claim construction and the teachings 

of Johnson and Gifford, we discern no distinction between 

the session identifier claims and Johnson alone, or Johnson with Gifford. In KSR the Court explained:

When we apply the standards we have explained 

to the instant facts, claim 4 must be found obvious. . . . we see little difference between the 

teachings of Asano and Smith and the adjustable 

electronic pedal disclosed in claim 4 of the Engelgau patent. A person having ordinary skill in the 

art could have combined Asano with a pedal position sensor in a fashion encompassed by claim 4, 

and would have seen the benefits of doing so.

550 U.S. at 422. We conclude that claim 79 of ’639 patent 

is invalid on the ground of obviousness.

D 

Secondary Considerations

Before reaching our conclusions regarding obviousness referred to above, we have also considered the matter of secondary considerations. Soverain argues that 

obviousness of all of the claims in suit is negated by the 

favorable market response that was achieved by Open 

Market’s Transact product, which Soverain states received “widespread recognition in the general media,” “an 
 SOVERAIN SOFTWARE v. NEWEGG 25

excellence award from the industry,” and was “widely 

licensed.” Soverain Br. 50-51. Newegg responds with 

evidence that the Transact system was abandoned by its 

developers and almost all of its original users. Newegg 

points out that licenses were taken to avoid the costs of 

litigation, and not to use the flawed Transact system 

embodied in its software. Newegg Br. 5-6.

The record does not establish a nexus between use 

of the Transact software and the patents. At trial, former 

Open Market employee and inventor Alexander Treese 

testified that Open Market had attempted to license its 

patents apart from the software, but without success. 

Trial Tr. 108 l.25-109 l.3, ECF No. 391 (testimony of 

Alexander Treese stating that patent licensing program 

went “Not very well.”). The record shows that the software was abandoned by almost all of its initial licensees, 

Trial Tr. 23 ll.12-25, ECF No. 392 (testimony of Soverain’s 

President Katherine Wolanyk), and is not used by those 

who bought litigation peace, compare id. 38 ll.12-15 

(listing current licensees of Transact) with id. 47 ll.17-18 

(listing companies that settled after being “contacted first 

with a lawsuit”). The assertions of commercial success as 

here presented do not support nonobviousness.

SUMMARY

The claims in suit of the ’314 and ’492 patents are 

invalid for obviousness over the CompuServe Mall system. The claims of the ’639 patent are invalid for obviousness over Johnson in view of additional prior art, and 

the other evidence presented. The judgments of validity 

are reversed, and therefore the judgments of infringement 

and damages are vacated.

REVERSED IN PART, VACATED IN PART